Volkswagen Reports a 3.3% Drop in Vehicle Deliveries for July
As global vehicle production slows, the world's biggest automakers are reporting slower car sales this year, including the world's second biggest carmaker Volkswagen AG. The German automaker reported a global drop in deliveries last month compared to the same period a year ago.
Volkswagen said it delivered 489,000 vehicles throughout the world in July, a 3.3% drop over the same period last year. Year to date, VW delivered 3.49 million vehicles deliveries representing a 3.8% drop from the prior-year figure.
In a generally declining global market, Volkswagen remains optimistic and said it succeeded in maintaining a stable market share both in July and for the year to date with only a 4% drop in deliveries reported.
"The situation on the global automobile market with its variety of regional challenges remains unchanged. It is gratifying to note that Volkswagen is maintaining a stable market position throughout the world in a generally shrinking global market. This is especially due to our highly successful SUV models, which have convinced our customers in all regions." said Volkswagen Sales Board Member Jürgen Stackmann in a statement.
In Europe, Volkswagen delivered 8.8% fewer vehicles in July 2019 than it did a year before. In China, Volkswagen delivered 2.0 percent more vehicles in a shrinking overall market and further expanded its market share.
VW said sedan sales are shrinking due to the popularity of SUVs and crossovers which have become widely popular with consumers, especially in the U.S.
"Our strong position in a shrinking global market is especially due to our highly successful SUV models." said Volkswagen Sales Board Member Jürgen Stackmann in a statement.
SUVs Make Up Over a Quarter of VW's Sales
Volkswagen's SUV sales continue to make up a larger portion of its overall global sales. The automaker reported that 27.5 percent of all vehicles delivered by Volkswagen from January to July were SUVs. In the comparable prior-year period, the share was 18.7 percent.
The Volkswagen brand's best-selling SUV model throughout the world up to the end of July was the Tiguan, joining two other popular SUV models that all saw their deliveries rise. The Touareg climbed 26%, Tiguan 16.9% and T-Roc rose 9.6% respectively.
In North America, Volkswagen reported a fall in deliveries of 4.1 percent to 48,200 vehicles. In the U.S., the brand continues to be highly successful. In the largest single market in the region, Volkswagen delivered 31,200 vehicles, 2.2 percent more than in July 2018.
U.S. deliveries of Volkswagen models rose for the fifth month straight. In July, the Tiguan remained Volkswagen's most successful model but sales of the full-size Atlas SUV also grew. SUVs once again accounted for more than half of U.S. deliveries.
VW Sales in Europe
In a generally shrinking overall market in Europe, Volkswagen reported that 148,100 vehicles were handed over to customers, 8.8 percent fewer than the same month last year. In Western Europe, the brand recorded a decrease of 7.7 percent to 125,600 vehicles.
In Central and Eastern Europe, the Volkswagen brand delivered 22,500 vehicles in July, 14.6% less than in July 2018.
Volkswagen's home market of Germany also experienced a decline. Last month, 47,100 vehicles were handed over to customers in Germany, representing a 11.9 drop over July 2018.
The automaker said the drop was expected as consumers took advantage of incentives to purchase cleaner burning vehicles. Volkswagen blamed it on the large numbers of orders received in 2018 as a result of the environmental incentive and the sale of NEDC vehicles prior to the introduction of Europe's Worldwide Harmonised Light Vehicle Test Procedure (WLTP) to measure fuel economy.
In Mexico, the overall market continues to shrink. Volkswagen closed the month with a fall in deliveries of 11.7% to 10,700 vehicles.
In South America, the Volkswagen brand delivered 42,900 vehicles to customers, 2.6 percent more than the same month last year. Once again, Brazil was the strongest single market in the region. Volkswagen delivered 34,000 vehicles to customers in Brazil, recording a rise of 13.5%.
Argentina is still struggling with a difficult situation in the general economy and a severely shrinking overall market. Volkswagen delivered 5,500 vehicles to customers, a drop of 33.3 percent compared with July 2018.
The drop in sales however, is due to the economic crisis in Argentina. The S&P Merval Index plummeted 48% this week, the second-largest single-day drop in any global stock market since 1950, according to Bloomberg.
The Volkswagen Lavida is the automaker's most popular model in China.
In the Asia-Pacific region, Volkswagen closed the reporting month with a slight increase in deliveries.
In July, the brand delivered 239,200 vehicles, up 0.9 percent on July 2018. In China, the biggest market for the automaker, the Volkswagen brand recorded a rise of 2% to 228,000 vehicles, in a market which once again shrank, and therefore further expanded its market share.
The SUV share in Volkswagen deliveries in China, the automaker's biggest market, rose from 13.9 percent in July 2018 to 28.8 percent in July 2019. Volkswagen reported that the Lavida and the new version of the Passat, developed exclusively for China, are especially successful. However, Volkswagen is counting on fully-electric vehicles for its future.
Volkswagen is planning on introducing more than 20 new electric models by 2022, as the automaker transitions from internal combustion engine models to EVs and becomes more of an electric brand.
Volkswagen is investing $50 billion in its global electric push will scale its EV production, pushing down costs to a point where they reach parity with vehicles powered by internal combustion engines.
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